JOHN Lewis has announced an eye-watering 99 percent nose dive in half-year profits adding the high street retail giant’s stores are being crushed by the “most promotional market we have seen for almost a decade”.

The John Lewis Partnership, which also owns Waitrose, reported that profits before tax crept in at £1.2million, down £95million on the same period last year regardless of its gross sales rising to 1.6 percent higher to £5.5billion.

The supermarket group went on to announce a special interim dividend of 2p per share, bringing the total interim dividend up 132% to 3.85p.

It comes as the huge company previously announced it had planned to make no profits whatsoever in the first six months of the new financial year.

During summer, the firm announced plans to close five Waitrose supermarkets, which followed John Lewis’s grave profits warning.

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This included four convenience stores and one supermarket, which slashed 200 jobs.

Waitrose stores that are closing are Spinningfields in Manchester, Manchester Piccadilly, Colemore Row in Birmingham and Portman Square and Camden in London.

The group said that profits at the department store chain have continued to be hit by moves not to pass on price hikes to consumers from higher inflation, as well as the cost of new stores and IT changes.

Sir Charlie Mayfield, chairman of the John Lewis Partnership, said: "These are challenging times in retail.

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"Profits before exceptionals are always lower and more volatile in the first half than the second half.

"It is especially so this half year, driven mainly by John Lewis & Partners where gross margin has been squeezed in what has been the most promotional market we've seen in almost a decade."

He added: "With the level of uncertainty facing consumers and the economy, in part due to ongoing Brexit negotiations, forecasting is particularly difficult but we continue to expect full-year profits to be substantially lower than last year for the Partnership as a whole.”

The plunge in profits from John Lewis comes amid a shocking wipe out of Britain’s high street.

During summer, the firm announced plans to close five Waitrose supermarkets (Image: GETTY)

Other stores that have been affected are House of Fraser, Homebase, New Look, Debenhams, Poundworld and Italian restaurant chain Prezzo, which have all announced closures.

House of Fraser was bought by Sports Direct boss Mike Ashley for £90milion last month.

Supermarkets Asda and Sainsbury’s also announced plans to merge at the beginning of summer.